Best option
the lesser
of 3 evils,
officials say

Officials in every local government in Colorado this time of year are busy compiling their best guesses to create a budget for 2011.

But this year, many of the state’s municipalities and county governments are crafting additional budgets, reviled as worst-case scenarios, that often include millions of dollars in local cuts if the state’s voters pass three measures that are on the ballot this fall.

* Amendments 60 and 61, and Proposition 101 promise deep reductions in fees and personal property taxes and would prohibit the state and local governments from incurring new debt. A Colorado Legislative Council report on the measures said the state would lose about $2.1 billion in annual revenues, including about $1.6 billion meant for schools. The report said K–12 education still would be funded. The money would just have to come from elsewhere, but doing so would leave virtually no money left for other state programs.

Local governments, meanwhile, can’t wait to see what voters will decide, having to adopt budgets by Dec. 15 deadlines. Instead, some governments are crafting two or more budgets to account for an unknown financial future.

If the voters pass the measures, the city is looking at roughly $11 million to more than $14 million in cuts. The city is crafting one budget to account for those cuts, projecting a general-fund budget of $58 million. Getting to that number would include broad cuts to city personnel, services and operations, Romero said. Specific cuts for that budget scenario haven’t yet been identified, she said.

If the measures don’t pass, Grand Junction is planning budgets for two relatively rosier futures. If revenues stay flat or increase slightly, the city is planning a $74 million budget. Another budget is more conservative, at about $69.5 million to account for reasonable dips in revenue.

In the past two years, city officials have crafted revised budgets several months into the new year to account for declining revenues caused by the economic downturn. If the downward revenue trend continues, officials project the $69.5 million budget will be applicable, and they won’t have to produce a revised budget several months into the new year.

“This is the first time we’ve fully prepared more than one budget,” Romero said. “Times have probably changed permanently.”

Grand Junction is just one of many local governments constructing multiple budget scenarios, said Gini Pingenot, policy and research supervisor with Colorado Counties Inc.

Three budgets are the most she has heard about any Colorado county putting together.

Mesa County, for example, will have to slash $7 million from its budget just if Proposition 101 passes, said Marcia Arnhold, Mesa County’s finance director. The county is drafting two budget scenarios to account for potential passage of the measures.

To help counties calculate losses prompted by approval of the ballot measures, government advocacy groups have been circulating a helpful template that should help governments calculate the cuts. However, if voters pass all three measures, calculations by city and counties across the state will vary.

For example, passage of Amendment 61 limits the amount of government debt and requires voter-approved debt to be repaid within 10 years.

Weld County, which has no debt, may be less affected than a municipality that already has taken on debt or is planning to take on debt, Pingenot said. The city of Fruita, for instance, is indebted for the next 30 years to the community center, and the federally mandated sewer plant won’t be paid for 22 years.

“There’s been a lot of head scratching. How do we get to this number?” Pingenot said of local governments’ attempting to crunch the numbers. “Once you have the number and make the cuts, you assume you made all the right interpretations. Those kind of questions are even bigger.”

Reeves Brown, spokesman for Western Slope advocacy group Club 20, said his group opposes the ballot measures because they too severely strap necessary funding. While the measures aim to reduce government spending, he questions how much governments are spending to create multiple budgets in anticipation of the cuts.

In talking with government officials on the Western Slope, he acknowledged they are “freaked out.” Government workers cannot use government time to lobby on measures that would affect governments.

“All they can do is tell their citizens what the anticipated outcomes should be,” Brown said. “I agree with much of the angst that led to these measures. People believe there’s a growing electorate that’s out of touch. The right answer is to kill these three (ballot measures) and engage in meaningful talk about how we make government more efficient. These three measures are the closest thing to anarchy our state has ever seen.”

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* CLARIFICATION: A previous version of this story confusingly reported that the amendments would increase funding for K-12 education by $1.6 billion.